Economic Impact of Government Fiscal Policy
Abstract
There is a great deal of discussion amongst economists regarding government’s approach to economic stimulation. The discussion centers on fiscal policy, and whether the government should take a Classical or Keynesian approach regarding U.S. economic issues. In this paper we briefly explore the Keynesian side of fiscal policy in an effort to see if government intervention serves as a useful tool in stimulating economic growth.
Economic Impact of Government Fiscal Policy
Over the course of the last few years there has been much discussion regarding the state of the U.S. economy and what the “right” approach is to stimulating economic growth and prosperity. As the 2004 election approaches, there is significant discussion by Democratic presidential candidates about the Clinton economy verses the Bush economy, as they compare and contrast the two administrations fiscal policies (Berlau, 2003). Even the media contributes to the debate regarding which administration’s fiscal policy is responsible for the current challenges faced by the U.S. economy.
Still the question remains, does the Keynesian activist approach serve the nation better in stimulating economic growth and prosperity, or would the nation be better served to follow a more Classical “laissez-faire” non-activist approach? The debate will undoubtedly continue for many years to come. Read more…
